Estate Planning Considerations for Single Parents

Estate planning is an important priority for all parents, but the need for an estate plan is even more compelling if you are a single parent with minor children. Your estate plan ensures that your children’s personal and financial needs will be taken care of in the event something unexpected happens to you. While it is difficult and uncomfortable to contemplate that possibility, protecting your children through a thoughtful, careful estate plan is a reflection of your love and concern for their well-being — one that also will give you peace of mind about their future.

Why Every Single Parent Needs an Estate Plan

For a single parent, a properly structured estate plan accomplishes a number of critical goals. Addressing your child’s needs in the event you are not able to care for them is always the foremost concern. In the estate planning process, you make critical decisions to ensure that your child is cared for by someone you choose and put a plan in place to provide for the child financially. By making these decisions yourself in your estate plan, you avoid having an Arizona court make those decisions for you, which is what happens if you do not have an estate plan.

Your estate plan also avoids having Arizona laws and judges determine the distribution and administration of your estate.

The Importance of Having a Will

A last will and testament is an essential document in almost every estate plan. By making a will, you avoid allowing Arizona laws and courts to determine how your estate is distributed and administered after death and decide other critical issues relating to your estate.

For a single parent, your will has another extremely important purpose. It is the document in which you nominate a guardian to care for your child if something unexpected happens to you.

If you do not nominate a guardian in your will, a probate court judge will decide who cares for your child, if appointing a guardian becomes necessary. The court-appointed guardian may be someone you would not want to have that responsibility. If you nominate a guardian in your will, the court is likely to defer to your wishes.

When you nominate a guardian in your will, it is a good idea to nominate an alternate guardian as well, to address the possibility that your first choice will not be able to assume the responsibility when the necessity arises. Even if your child’s other parent is living and may be legally entitled to custody, it is advisable to nominate a guardian and alternate guardian in your will.

Your will also addresses distribution of the property in your estate. You have several alternative strategies for providing financial security for your child. Your estate planning attorney helps you make the most appropriate and suitable choice for your personal and financial circumstances.

Protecting Your Child’s Financial Future With a Trust

In many cases, a trust is the best strategy to protect your child’s future financial security. If you leave property directly to a minor child in your will, through beneficiary designations, or otherwise, the court will appoint a person to manage the assets until the child reaches the age of 18 years. At that age, the child receives all the property outright. Most 18-year-olds do not have the maturity or knowledge to properly manage financial assets. Setting up a trust enables you to provide for knowledgeable management by a trustee until your child reaches an age at which they are capable of responsibly managing their inheritance.

A trust is a separate document in an estate plan. In the document, you establish the terms for distribution of the trust assets and appoint a trustee to manage and distribute the property until the time the child receives the full amount. A trust protects the assets, so they can be used for education, medical expenses, and other necessary or desirable reasons.

There are many different kinds of trusts. Your attorney assists you in choosing the right type of trust for your goals and situation. Often, a single parent establishes a revocable living trust to provide for the child’s future. In addition to providing control over distributions, a revocable living trust offers the opportunity to avoid probate for assets placed in the trust during your lifetime. Avoiding probate saves time in making your child’s inheritance available, saves the costs and expenses of the probate process, and avoids having the financial details of your estate become publicly available.

In addition, if you have assets with beneficiary designations, such as retirement plans, IRAs, life insurance, and bank accounts, you can designate your trust as the beneficiary of those assets, thereby avoiding the undesirable consequences of naming a minor as the beneficiary.

Finally, if the other parent of the child is living, establishing a trust managed by a trustee that you select effectively prevents the other parent from gaining control over your minor child’s finances if something happens to you.

Other Documents in a Single Parent’s Estate Plan

In addition to a will and trust, a complete Arizona estate plan includes other documents to protect you during your life. They include durable powers of attorney, in which you designate a trustworthy person to make decisions for you or act on your behalf if you become incapacitated. For many people, it is also advisable to create a plan to protect their digital assets as part of their estate plan.

Getting Help From an Estate Planning Attorney

Single parents who need an estate plan should reach out to an experienced estate planning attorney for help creating a thorough and sound estate plan. Attempting to create an estate plan or any legal document like a will, trust, or power of attorney without knowledgeable assistance from an attorney poses considerable risks.

Nothing is more important than protecting your child by addressing future contingencies in your estate plan. The risks and costs of addressing issues that can arise with DIY (Do-It-Yourself) documents far outweigh the small amount of money you might save by attempting to make your own estate plan or legal documents. At Peterson Law Offices, your initial consultation is always free, so there is no reason to hesitate to talk with us about creating an estate plan.

Schedule a Free Consultation With an Experienced East Valley Estate Planning Attorney

At Peterson Law Offices, estate planning is a primary focus of our practice. We provide top-quality services at affordable prices to clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler.

Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.

Categories: Estate Planning